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A company that manufactures paving material for driveways and parking lots expects the following demand for its product for the next four weeks:
Week number: 1 2 3 4
Material (tons): 40 80 60 70 (where 40 is for week 1, 80 for week 2, 60 for week 3, and 70 for week 4)
The company's labor and machine standards and available capacities are as follows:
Labor Machine
Production standard 4 3
(hours per ton)
Weekly production
capacity (hours) 300 200
a. Determine the capacity utilization for labor and machine for each of the four weeks.
b. In which weeks do you foresee a problem? What options would you suggest to resolve any problems?
What costs are relevant in making a decision on choosing an option?
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